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CBS News
13 hours ago
- Business
- CBS News
Want to qualify for credit card debt forgiveness this August? Don't do this.
It's understandable if the idea of having a large portion of your credit card debt forgiven sounds too good to be true. After all, in today's still sticky inflationary climate in which the rate rose in the last two months and in which elevated interest rates are making borrowing cost-prohibitive, it may feel like there are few viable options for regaining your financial health. But if you're stuck with high-rate credit card debt, forgiveness may be the solution you desperately need now. For qualified borrowers, a credit card debt forgiveness program (also known as debt settlement) can help reduce your balance by 30% to 50%. That's real relief that can be the difference between financial independence and remaining mired in high-rate debt indefinitely. But if you want to qualify for a credit card debt forgiveness program, it's important to start by understanding eligibility. This may require making some select moves now, especially if you're looking to be approved to start the plan this August. And it may require avoiding some missteps, too. In other words, if you're looking to qualify for credit card debt forgiveness this August, it's equally important to know what not to do. Below, we'll break down what you need to know now, this July, that can help you qualify before August 31. See how much of your credit card debt could be forgiven with a program here today. While the following list is not exhaustive, by avoiding these three seemingly innocent (but costly) mistakes, borrowers can improve their chances of being approved for a debt settlement program. It may seem counterintuitive to stop making payments on your credit cards when trying to get debt relief support. But that's what will be required if you're looking to qualify for forgiveness. Consider halting your payments, then, whether they be automated minimum ones made each month or those you make independently. By making your payments, even if they're doing little to reduce your overall debt, you're demonstrating an ability to pay to the credit card company. Sure, this may take months, years or even more than a decade to pay off what you owe in full, but making payments implies an ability to make some sort of progress, thus reducing your likelihood of being approved for forgiveness. And, yes, halting payments will damage your credit score, but if you need the help credit card debt forgiveness offers, the majority of that damage may have already taken place. Learn more about the credit card debt relief options available to you now. One of the key ways to qualify for credit card debt forgiveness involves demonstrating an inability to pay. If you have a medical issue that's hurt your ability to earn an income, a job loss that has left you without a viable income stream or something else entirely, you'll need to prove it to qualify for help. So don't throw away your medical bills, proof of job loss or anything else that clearly illustrates your current financial circumstances. Sure, you may be able to request copies of the paperwork needed here, but that could take weeks or even months to secure, delaying your forgiveness approval comfortably past August and potentially well into the fall. You'll typically need $7,500 to $10,000 worth of credit card debt to be approved for a forgiveness plan. But if you don't have that much, increasing your debt load to meet that threshold isn't the right move. Remember, forgiveness will only cover 30% to 50% of what you owe, so you'll just be causing your debt load to increase unnecessarily. Additionally, with alternatives like debt management programs, credit counseling and debt consolidation loans (among others), there are multiple debt relief alternatives available and worth exploring if you don't have enough debt to qualify for forgiveness. This is a good problem to have as it means your debt situation is more manageable than others, so use that to your advantage and avoid racking up additional debt to meet the forgiveness threshold requirements. This summer could be the smart time to start the delayed work of getting out of high-rate credit card debt and regaining your financial independence. If you're focused on qualifying for a forgiveness program, however, avoiding these mistakes can help you become a more attractive candidate for debt relief companies. The key here, however, regardless of whether it's via a forgiveness program or some other debt relief service, is to be proactive and to take action. It likely took a long time to build up your balance, and it will take time, effort and due diligence to dig out of that financial hole, so starting that process as soon as possible makes the most sense now.
CBS News
13 hours ago
- Business
- CBS News
Best reverse mortgage lenders, plus top advice homeowners should know now
As retirement approaches, many homeowners find themselves asset-rich but cash-poor, with significant equity tied up in their homes while facing reduced income streams. And, that's especially true in today's inflationary environment, which is causing the costs of just about everything to rise, making it more difficult for retirees to ensure that their retirement funds will last as long as they need them to. In turn, senior homeowners are increasingly exploring the benefits of reverse mortgages, as these specialized loans allow them to tap into their home equity without the burden of monthly payments. The reverse mortgage landscape has evolved considerably in recent years, though, with both government-backed Home Equity Conversion Mortgages (HECMs) and private proprietary programs offering different advantages to qualified borrowers. And, as with any other type of borrowing product, not all reverse mortgage lenders offer the same terms, rates or level of service. So, if you're planning to take out a reverse mortgage, knowing which lenders excel in which areas can help you maximize the benefits while minimizing potential risks associated with these complex financial products. To help you get started, we've outlined a few standout reverse mortgage lenders below. We've organized them by what sets them apart so you can match a lender to your unique situation and goals. Start exploring your top reverse mortgage lenders here today. Here are some of the best reverse mortgage lenders broken down into five categories: Longbridge Financial is ideal for budget-conscious borrowers who are seeking a reverse mortgage with minimal upfront costs. It consistently offers some of the lowest interest rates in the industry and waives monthly servicing fees for many borrowers, which can help borrowers save significantly over the life of the loan. Longbridge also acts as its own loan servicer, ensuring you'll deal with the same company from application through repayment. This continuity can be a huge advantage if you want to avoid the confusion that comes when servicing rights are transferred to a third party. Plus, the lender provides an impressive library of educational resources, making it a great fit for first-time reverse mortgage borrowers who want to fully understand their options. Find out more about Longbridge here. American Advisors Group (AAG), which was recently acquired by Finance of America, is a dominant player in the reverse mortgage space, offering a wide range of federally insured HECMs as well as proprietary jumbo loans for high-value homes. This variety makes it an attractive choice for homeowners with different needs, whether they want a traditional HECM or need to access more equity than FHA limits allow. AAG also provides tailored options for receiving funds, including lump sums, monthly payouts and lines of credit, giving retirees flexibility to structure their loans in a way that fits their financial plans. Both AAG and FOA's strong reputations for customer service and AAG's extensive educational materials make this lender particularly appealing for those seeking a highly customizable experience. Guild Mortgage stands out for its ability to work with borrowers in unique situations, making it a strong option for homeowners who may not fit the traditional reverse mortgage mold or those looking for larger loan amounts than they could otherwise qualify for. That's because, alongside standard HECM loans, Guild offers proprietary reverse mortgage products designed for higher-value homes and borrowers looking for larger loan amounts than federal limits allow. That flexibility makes Guild an excellent choice for retirees with significant home equity or non-standard property types. The lender also provides multiple disbursement options, including lump sums, lines of credit and monthly payouts, so you can tailor your reverse mortgage to meet your financial goals. Fairway combines a national presence with the personalized touch of local branches, offering reverse mortgage options backed by high customer satisfaction ratings on third-party review sites. As a result, this lender may be particularly appealing for borrowers who prefer face-to-face lender interactions and hands-on guidance throughout the process. Fairway also has a highly rated mobile app for managing the reverse loans it issues, which bridges the gap between in-person service and digital convenience. One potential drawback is that Fairway may transfer loan servicing after closing, so if keeping your loan under one roof is a priority, you may want to ask about this up front. Find out more about Fairway here. Unlike direct lenders, Northwest Reverse Mortgage operates as a broker, connecting borrowers with multiple lenders and a wide range of products. This approach allows you to compare rates, terms, and fees across several options without doing all the legwork yourself. Northwest is especially useful if you're shopping for jumbo reverse mortgages or niche loan types like HECM for Purchase. However, Northwest's reverse mortgage services aren't available in all 50 states, so if you're interested in this lender, you'll need to confirm availability in your area. For homeowners who want a one-stop shop for exploring multiple offers, though, Northwest may offer a flexible, time-saving solution. While a reverse mortgage can be a smart way to cover your expenses during retirement, it's important to approach this type of borrowing carefully. Here's how you can do that: Reverse mortgages can unlock vital funds for retirement, but only if they align with your future plans and you find the right lending partner. So, choose a lender that excels where you need it most, whether that's low cost, support, digital ease or broad options. Most importantly, stay informed about costs, eligibility rules and how the loan fits into your long-term financial picture so you can take advantage of the financial flexibility this borrowing option offers without compromising your home or other benefits.
CBS News
19 hours ago
- Business
- CBS News
Are promotional HELOC offers worth considering now? Experts weigh in
Lenders looking to capture the interest of borrowers are rolling out promotional interest rates on home equity lines of credit (HELOCs) as a way to stand out in the current high-rate environment. Currently, average interest rates on a home equity line of credit (HELOC) are hovering around 8%. As the Federal Reserve continues its fight to lower inflation, interest rates on borrowing products remain elevated. While HELOC rates are still much lower than a credit card or personal loan, some lenders are offering below-average introductory rates, cashback incentives or waiving closing costs to entice borrowers to tap their home equity. While promotional HELOC offers can be appealing, they may have some strings attached. If you're not careful, it could cost you more in the long run. We spoke with various home equity borrowing experts on what to consider before taking advantage of a promotional HELOC in today's climate and how to decide if it's worth it. Start by seeing how low of a HELOC rate you'd be eligible for here. Promotional HELOC offers can help you qualify for a lower introductory rate for a set period, typically six to 12 months. For example, you could qualify for a low APR of 3.99% to 5.99% for the first six months. Some credit unions may even offer lower HELOC rates as part of an introductory offer. As part of the promotion, there may be no annual fees or closing costs. These enticing benefits can help get you in the door as a customer. As a borrower, taking advantage of a promotional HELOC offer can result in cost savings. Here's what to consider first: If you're shopping around and find a promotional HELOC offer, evaluate the benefits. What are you getting out of it as a borrower? It could be a lower introductory rate and/or no closing costs. How much do you stand to save compared to other HELOC offers? You'll want to weigh those benefits against any potential drawbacks, like loan minimums, prepayment penalties, or early termination fees. Some introductory rates may be compelling and offer obvious savings, whereas others may not be as competitive. You also want to think long-term when opening a HELOC and not just think about the short-term intro rate. "I think they first of all have to figure out what the most important feature is for them. Do you get a better rate with a 5-year line of credit than you do with a 10-year line of credit? But are you prepared to start paying it back in 5 years? Are there prepayment penalties?" says Melissa Cohn, the regional vice president of William Raveis Mortgage. Explore your current HELOC rate offers here to learn more. All good things come to an end — and that's true if you score a super low HELOC promo rate. The introductory rate could last six to 12 months, based on your loan agreement. Once the intro period is over, your HELOC rate could jump significantly. To avoid any costly surprises, understand exactly how and when your HELOC introductory rate will change. "Lenders are required to qualify you based on the fully indexed rate, not the teaser, which offers some protection. The key thing to look at with HELOCs is the margin. These loans are tied to prime plus a margin. So if prime is 7.5 percent and your margin is 2 percent, your actual rate is 9.5 percent. That is the rate you will be paying once the promo ends," says Jill Carrade, a mortgage broker at Pro Mortgage. Home equity line of credit borrowing can be a smart alternative to other borrowing options. Homeowners can tap into their built-in equity and score a lower rate, instead of turning to credit cards. But you're still borrowing money that you have to pay back. It's essential to know how you plan on using the funds and how you'll repay what you borrow. If you know you can pay off your HELOC quickly, a promotional HELOC offer can be a bonus, as long as there are no prepayment penalties. "Make sure your personal goals align with the product and purpose selected. If you are funding a short-term 12-month 100k kitchen renovation and know you'll get that bonus or cash windfall to pay a chunk off within a short time frame - take a low teaser rate and then pay the balance off before terms adjust or you hit the downside," says Christopher Thomas, a mortgage loan originator with Iris Mortgage. Promotional HELOC offers are attractive. In this high-rate environment, getting a low interest rate, even for a short period of time, can make a difference. It's crucial to read the fine print, however, so your cost-saving efforts don't backfire. "The other promotional item that a lot of home equity line providers offer is a waiving of closing costs," says Jason Lerner, branch manager at First Home Mortgage. "Typically, though, the fine print with that is that if someone repays their home equity line off or pays it down to 0 within a certain amount of time, or closes the account, often they have some type of prepayment penalty that then allows the lender offering the promotion to recoup some of those expenses." You also want to make sure you meet the eligibility requirements for the promotional HELOC. Some financial institutions may only offer these promotional HELOC rates to existing customers. If you're not a current customer, you may be roped into opening additional accounts. "Another practice is to require the consumer to open multiple other accounts in conjunction with the HELOC. The accounts could be credit cards, checking accounts and savings accounts. It is important to ask questions and thoroughly read all the paperwork," says Mark Worthington, a loan officer and branch manager at Churchill Mortgage. Learn more about opening a HELOC online here. Homeowners looking for financing may qualify for lower rates with a HELOC. Getting a promotional HELOC offer could provide even more savings, but only for a specific amount of time. It's key to read the fine print so you don't end up spending what you save on penalties or fees. Shop around and compare various options with different home lenders. "I would focus on comparing apples to apples as much as possible. Isolate the same rate and adjustable or fixed term. Then compare the APR, fees, fine print, and any early payoff penalties," says Thomas. You also want to be aware of potential repayment issues. HELOCs typically offer borrowers interest-only payments during the draw period. The rates are also subject to fluctuations as they're variable. Once you enter the repayment period, your monthly payments are likely to go up significantly. Some lenders may require a balloon payment when you hit the end of your loan term. If fixed payments are easier for you, you can also look into a home equity loan. Home equity loan interest rates stay the same throughout your repayment term, making payments more predictable. Before tapping any home equity, have a plan, do your research, and compare offers to find the best option for your situation.
Forbes
a day ago
- Business
- Forbes
Latest HELOC & Home Equity Loan Rates: July 22, 2025
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations. Home equity loans and home equity lines of credit (HELOCs) allow homeowners to tap into the value of their homes. A home equity loan is a fixed-rate, lump-sum loan that allows homeowners to borrow up to 85% of their home's value and pay that amount back in monthly installments. A home equity line of credit is a variable-rate second mortgage that draws on your home's value as a revolving line of credit. Both options use your property as collateral for your payments, which means your lender can seize your property if you can't repay what you borrow. Ideal for Medium-Sized Projects A $100K HELOC is suitable for more extensive renovation projects or other significant financial needs. Compare the rates and terms to find the best fit for your situation. Access More Funds for Major Investments For larger projects or investments, a $250K HELOC provides the necessary funds with various LTV options. Explore these rates to determine the right balance between borrowing capacity and risk. Maximize Your Borrowing Power If you have substantial equity in your home and need significant financing, a $500K HELOC offers a great deal of borrowing power. Evaluate these options to find the optimal rate and term for your goals. A 5-year term offers a shorter repayment period with typically higher monthly payments. These products are suitable for borrowers looking for a quicker payoff. With a 10-year term, borrowers can enjoy a balanced monthly payment while still building equity quickly. 10-year home equity loans are ideal for medium-sized projects or financial needs. A 15-year term provides lower monthly payments compared to shorter terms, offering more affordability while still progressing toward your financial goals. Offering longer repayment and lower monthly payments, 20-year home equity loans are suitable for larger investments and long-term financial planning. The 30-year term maximizes affordability with the lowest monthly payments. These options are best for substantial borrowing needs and long-term investments. Home equity lines of credit, or HELOCs, are loans that allow you to borrow against your home's equity - the current market value of your home minus your remaining mortgage balance. When you get a HELOC, you can take the money available in installments as you need it, and pay interest only on what you use. Your equity in your home comes from how much you've paid on your mortgage. The longer you've been paying off your mortgage, the more equity you have. You can tap into that equity through a home equity loan . A home equity loan is paid out in a lump sum that you can use for home improvements, home repairs, debt consolidation or another major expense. The amount you're approved for is based on how much equity you have in your home, your credit score and history, and how much you need. Different home equity lenders offer different repayment terms, but longer repayment terms usually mean lower monthly payments. This might be helpful for you if you're paying both your original mortgage and a home equity loan at the same time. You'll calculate your home equity by taking your home's current value - based on its most recent appraisal - and subtracting it from your current mortgage balance. For example, say your home is valued at $500,000 and your mortgage's outstanding balance is $250,000. This would mean you have $250,000 in home equity, and your loan-to-value ratio (LTV) would be 50%. If you're looking for a home equity loan or line of credit, lenders usually only approve up to a certain LTV ratio. For example, some lenders require 80% LTV or less.
Forbes
a day ago
- Business
- Forbes
This Week's Personal Loan Rates: July 22, 2025—Rates Move Down
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations. Rates on personal loans declined last week, giving qualified borrowers a chance to secure a decent interest rate and finance a project, purchase or even unexpected bills. From July 14 to July 19, the average fixed rate on a three-year personal loan was 13.24% for borrowers with a credit score of at least 720 who prequalified on personal loan marketplace. The rate was 13.72% the previous week, according to The average rate on a five-year personal loan rose 0.25 percentage point last week to 19.46% from 19.21%. Keep in mind that well-qualified borrowers may be offered rates well below average. The rate you'll actually receive depends on several factors, like your credit profile and the loan terms you choose. These rates are accurate as of July 19, 2025, and based on the three-year fixed rate. Related: Best Personal Loans Personal loan rates fluctuate frequently, and each lender determines and sets different rates. While your rate isn't guaranteed until you sign your loan agreement, you can get an idea of average lender rates below. The table below compares personal loan rates for three- and five-year terms to help you understand rate trends. Lenders typically consider your loan term and credit history to determine your interest rate. Your credit score plays a major role in the interest rate a lender offers for a personal loan. Lenders use your credit profile and other factors to evaluate your risk as a borrower. In general, the higher your credit score, the lower the interest rate you'll receive. The table below compares average personal loan interest rates by credit score, showing how much your score can affect your rate and how much you could save over time. We recommend using these steps to compare and get the best personal loan rates: Prequalify. Prequalifying can allow you to understand the rates you might be offered before officially applying. Although the loan terms shown aren't guaranteed because prequalification is not an offer of credit, you can use these offers to compare lenders. Compare your offers. We recommend prequalifying with multiple lenders so you can compare offers side by side. Interest rates, loan amounts, repayment terms and potential fees will help you understand the cost of borrowing from each lender, but be sure to consider other attributes as well. Some lenders charge fees such as prepayment penalties, and others offer loan deferment if you have trouble making payments. Apply. After you choose your lender, submit an application. Have any required documentation ready to share, including bank statements, W-2s and employer information. Related: 5 Personal Loan Requirements To Know Before Applying We recommend you get a personal loan only when it's necessary. If you're considering a personal loan, these steps can help you understand if it's the right choice: Identify why you need funds. Before taking out a personal loan, understand how you would use the funds. Some common personal loan uses include home improvement, debt consolidation and covering emergency expenses. It's best to avoid using personal loans for nonessential expenses that you could potentially save up for, like vacations and holiday gifts. Determine how much financing you need. Once you identify why you need the funds, calculate how much you need to cover your costs. This amount will typically inform you of the loan amount you need or if you can use an alternative. Consider personal loan alternatives. If you only need to borrow a small amount of money, such as under $2,000, consider alternative options such as a payday alternative loan (PAL) or a buy now, pay later service. Find a lender that fits your needs. If you can't find an alternative that fits your needs, find a personal loan lender that provides sufficient financing. Pro Tip In some cases, getting a personal loan may not be the best decision. For example, we don't recommend a personal loan if you can't afford the monthly payments or if you can wait to save up the money you need. You can find a personal loan online or in person, depending on the institution. With varying lenders offering personal loans, you can find one that works best for you. Lenders offering personal loans include: Banks: Best for in-person banking and opening a personal loan with your current bank. Best for in-person banking and opening a personal loan with your current bank. Online lenders: Best for flexible qualification requirements and an online-only experience. Best for flexible qualification requirements and an online-only experience. Credit unions: Best for those who meet a nearby credit union's eligibility requirements or are current members. Frequently Asked Questions (FAQs) While borrowers with strong credit typically get more favorable interest rates, lenders also rely on current market conditions to set interest rates. If you have good credit but your annual percentage rate (APR) is high, it may mean interest rates are generally high. That said, it can also mean your income isn't high enough to qualify for lower rates or your debt-to-income ratio (DTI) is too high. You can typically repay a personal loan early. However, some lenders charge a prepayment penalty as a percentage of your loan or a flat fee. If you want to pay off your loan early, confirm with your lender whether it charges a fee.
